Transparency is a core value at Rocket and this rings especially true when it comes to communicating with our landlords and keeping them up to date on how we are managing their property portfolios.
In the spirit of transparency, we wanted to explain to our existing landlords and prospective landlords how we go about calculating their properties' value for rental or sale, as it’s a key part of the service that we offer.
You won’t be surprised to hear that it’s not simply a matter of throwing numbers at the wall and seeing what sticks, it’s an art that I have finely-tuned during my 30 years of experience in the industry.
The starting point for calculating the value of a property is comparing it to other properties that are of a similar size and are in a similar location.
Rightmove is an effective tool that we use to find these, as it shows recently sold properties, as well as providing photos, floor plans and a price.
Making comparisons to properties that have already sold is far more important than looking at what’s on the market, as this is only an indication of what the landlord is aspiring to achieve, but not what is necessarily realistic.
From here, it’s about making the relevant adjustments based on the differences in the properties, which could range from size to outside space, condition of the property, appliances and a number of other factors.
Outside space, for example, can make a huge difference. We recently attempted to sell a property for £650,000, but were unsuccessful, until we spent £20,000 adding a roof terrace and then it sold for £737,000.
Calculating a rental value for a property can be a little more nuanced than working out the sales value, as you have to rely on your own evidence with there being less available online.
This is where experience comes into play. It’s something that you get naturally better at over time, as it’s an art not a science, and fortunately I have over 30 years’ experience in valuing property.
With that being said, rate-per-square-foot is something concrete that you can use to get a rough idea of a properties rental or sales price.
If something in the area you’re looking at has already been let for a certain price then you can compare it to the property you are looking to put on the market and adjust it based on the rate-per-square-foot.
At Rocket, we also pay for access to additional data, such as Rightmove plus and Zoopla Pro, which allows us to calculate rental prices even more accurately.
Once we have collated our evidence, prior to putting any property on the market, we provide our clients with a best price guide, listing the comparable properties we have used to come to a valuation.
In this guide, we will also supply the landlord with a price range and then depending on their needs and the current state of the market, with their consultation, we select a price at which the property will enter the market.
We are by no means perfect, but 90% of the time we will get it right and the other 10% we will have to make adjustments once the property is on the market.
But, unlike many other agents, we’re not too proud to admit our mistakes and as soon as we realise we might have got it wrong, we will make adjustments quickly to get the landlords property sold or let as efficiently as possible.
If you need help valuing a property for sale or rental to take to the market, get in contact and we would be happy to help.
